Assessment of New Entrant Banks Performance Pre and Post Covid-19 Using the CAMEL Model: A Case Study of Selected banks in Ethiopia

Abstract

The aim of this research is to examine how the profitability and performance of Addis International Bank, Debub Global Bank, and Enat Bank S.C. have been affected by the COVID-19 pandemic. These banks were selected not only because of the global health crisis but also in light of the National Bank of Ethiopia's mandate for them to reach a paid-up capital of 5 billion birr, which is the minimum requirement for operating in the banking sector. These institutions were already facing challenges in meeting this capital threshold prior to the pandemic, with the possibility of forced mergers if they fell short. To gauge the pandemic's impact, this study has compared the banks' performance before and during the pandemic using the CAMEL model. The analysis has focus on CAMEL indicators for Ethiopian commercial banks spanning from 2014 to 2023, employing secondary panel data and an econometric model within the E-Views software.